One Fundraiser’s Response to the Opinion that The Nonprofit Sector Should Go

Guest post! Thanks to Jon Thorsen for his witty take on recent suggestions that the nonprofit sector should be eliminated:
In the December 10 issue of Forbes, contributor Josh Freedman argued for the elimination of the nonprofit sector. Using the obvious target of Harvard as an organization that does not require tax breaks, he writes “The best solution is to eliminate the very idea of the nonprofit sector.”

Having worked in this sector for nearly thirty years, I’m in favor of diligent – perhaps even increased – scrutiny of our sector. I’m glad that watchdog organizations are paying attention to our work and that our industry publications such as The Chronicle of Philanthropy and The NonProfit Times report the misbehavior that is characteristic of the extreme exception of nonprofit employees.

But Mr. Freedman errs in his facts – he states that education and health “are far and away the largest charitable sectors,” when in fact religious organizations continue to constitute the largest portion of the nonprofit sector in both number and dollars contributed – and in conveniently ignoring a couple of important realities.

First, he strongly suggests that we would be better served by allowing corporations to fill the role of the nonprofit sector, ignoring the fact that the percentage of profits donated by the corporate sector has remained virtually unchanged for decades, despite increased levels of need.

And he similarly ignores the cause of that increased need. While he correctly notes that “the idea of a nonprofit ‘sector’” is a recent phenomenon, he fails to identify the reason our sector became so necessary.

A direct consequence of the “Reagan Revolution” that the followers of Forbes continue to celebrate was a widening wealth gap that has only worsened in subsequent years. (This issue was explored and explained informatively in Julian Wolpert’s 1993 book Patterns of Generosity in America: Who's Holding the Safety Net?)

And speaking of safety nets, in 2012 the Pew Research Center published a report on the widening partisan polarization in America, noting that “Republicans and Democrats are furthest apart in their opinions about the social safety net. There are partisan differences of 35 points or more in opinions about the government’s responsibility to care for the poor, whether the government should help more needy people if it means adding to the debt and whether the government should guarantee all citizens enough to eat and a place to sleep.”

Let’s be clear here: The “for-profit sector” and the government did not just walk away from the neediest Americans – they fled. This is what makes it tough to listen to Forbes writers and politicians such as Charles Grassley routinely railing against charities. These critics carry the moral authority of a deadbeat dad complaining about the quality of universities to which his ex-wife and her new husband are paying to send his children.

Again, I don’t dispute that charitable organizations require oversight. In fact, I welcome honest, open and transparent overview of our sector. The vast majority of American nonprofits do wonderful work in effective and responsible ways, so getting additional opportunities to advertise our remarkable results can only be a good thing.